This is helping the six-location chain expand across state borders to open around 35 locations in the next five years. It will do this through a mixture of corporate stores and franchised locations.

President and CEO Michael Ansley talks to RMGT about his plans for expansion and why his better-burger business is doing better and better.

What attracts diners to Bagger Dave’s?

Primarily it’s burgers and beer. The burger business has grown, largely through Five Guys [Burgers and Fries], but we’re more than that.

Service is what sets ups apart from the rest of the burger segment outside of Red Robin. Most others are counter service so we have great service; we have great atmosphere and we feature Michigan craft beers and pair them with food.

As part of our atmosphere, we have a train about eight feet in the air that goes around and around. A lot of our vendors like to advertise on it. It’s in the main dining room but it keeps the kids busy. And the parents love it because their kids are entertained. We also have historical photos at each location.

We feel very strongly that we offer a lot more than these counter service businesses. We have a stronger dinner business and stronger weekend business. Our business is 40 percent lunch, 20 percent middle of the day (2 p.m. to 6 p.m.) and 40 percent dinner.

What are your plans for growth?

This year we plan on opening three corporate stores in Michigan and five next year so we’ll have a total of 11, and the year after that about six.

We’ll franchise in Kentucky, Ohio, Indiana, Illinois, and Wisconsin because of distribution, operations and branding. We'll mushroom out from the core, which is the only way to expand effectively. Our goal is 24 franchise stores in the next five years.

How will you make the transition from corporately owned stores to franchise stores?

Our company, Diversified Restaurant Holdings, has Buffalo Wild Wings franchised restaurants, so that has helped us a lot in creating the operational manuals, charts (kitchen charts and food preparation), training manuals, business software, and with our distribution. Because we have a lot of franchises through Buffalo Wild Wings we have many operations people with a franchising background.

Why do you plan to have some corporate stores and some franchised?

We have a team in place and ready to go for our corporate stores, and they’re very attractive as a revenue generator.

Franchising is profitable but doesn’t necessarily drive the top line. A lot of great ideas come from our franchisees. They’re entrepreneurs so that helps us grow.

But if we’re going to franchise, we should have blood in the game so we can be in it with them and face the same challenges they’re having.

Why are you offering competitive incentives for franchisees?

We’re not in the business of financing franchisees so we wanted to make it attractive to [franchisees] to have five or six stores. We came up with the Finders Program—if you open six stores in five years, for every store you open on time you get one year’s worth of royalty abatement.

So we’re taking some risk with them. And that gives them more money to go on and open the next store.

We also have another program—for every store opened on time in a three-store development program, the franchisee gets six months’ royalty abatement.

How and why is the design of each restaurant localized?

We go to the historical society, local library, etc. and get old, local photos and blow them up into murals. So every restaurant has a local feel. It’s a connection to the community.

People love that, especially older people. It shows we care about the community. We also get involved in everything—schools, charities, etc.—so we get connected in that way.

By Amanda Baltazar

To learn more about chains expanding via corporate and franchised stores read about Andy’s Burgers.

News and information presented in this release has not been corroborated by FSR, Food News Media, or Journalistic, Inc.